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11th Annual Latin American Conference
2001 2002 2003 2004 2005 2006
Public PrivateSource: INEP/MEC
Why Invest in Education in Brazil
Post-secondary Enrollments – (Unesco – 2005, million)
Post-secondary Institutions in Brazil (units) Total Enrollments (million)
Gross Enrollment Rate (Unesco - 2005)
Largest market in Latin America, with low penetration rates and increasing demand for qualified labour
2
11%
22% 24% 24%
48%
65%71%
83%
India China Brazil Mexico Chile Argentina Russia USA
High Growth Potential23.4
17.3
11.8
9.0
4.5 4.0
China USA India Russia Brazil Japan
183 195 207 224 231 248
1,208 1,442
1,652 1,789 1,934 2,022
2001 2002 2003 2004 2005 2006
Public Private
Positive Sector Dynamics
69%
73%72%
71%70%
74%
31% 27%28%29%30% 26%
3.0
4.54.2
3.93.5
4.7
High Potential for Consolidation
1,934 Institutions3.3 million enrollments
Sector Overview: Highly Fragmented Market
Top 10 Non-Government Institutions Market Share (2005)
Based on Number of Enrolled Students
Non-Government Institutions (number & Size)
2K < 4.9K
1,014
616
173
Top10 largest post-secondary institutions account for less than 20% of total enrollments1
Numbe
r of i
nstit
utio
ns
Up to 499
500 < 1.9K
5K or more131
Number of students
3
17.4%
82.6%
10+ Others
(1) Source: Hoper Educational (2005)
Positive Sector Dynamics
4
Who we are
Campus Rebouças
Campus Tom Jobim
Campus R9
Who we are
Largest Player in the Private Post-Secondary Sector in Brazil, with broadest geographical coverage
205* thousand undergraduate students
National Footprint: 77 campuses in 16 states
2 Universities, 2 University Centers and 20 Colleges
Strong Shareholders base: Founder Shareholders and GP
Best Governance Practice: Novo Mercado
Asset Light Model: ROE of 20%
LTM Revenue of R$901 million and LTM EBITDA of R$98 million
(*) - Includes 5 recent acquisitions, which are in process of approval in Extraordinary Shareholders´ Meeting
23 2635
51
70
118
141135
144
162 167178
205*
1970/96 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1H08
Growth History
Turnaround andPreparation for IPO
Turnaround andPreparation for IPOStrong Organic GrowthStrong Organic Growth
National Leadership
North and Northeast:
subsidiaries for profit status
Main subsidiary (SESES): for profit
status (Feb/07)
Begin National Expansion
Un
de
rgra
du
ate
Stu
de
nts
(i
n t
ho
us
an
d)
5
(Accounting and Management systems)
IPO (July/07)
Who we are
GP (May/08)
Efficiency Gains and
Consolidation
Efficiency Gains and
Consolidation
(*) - Includes 5 recent acquisitions, which are in process of approval in Extraordinary Shareholders´ Meeting
Student profile
6Who we are
Self-financed students
Family income up to 10 minimum salaries (~73%)
Searching for Career Salary improvement
Living in Urban Centers (large cities)
Young working adults (~70%)
• Convenience multi-campus
• Internship Programs
• Adequate Facilities
• Competitive Price
• Quality
• Focus on Labor-Market
Target Market
What we already did in 3 months
• New Board of Directors (8 members, being 3 independent) Composition reflects the balance between deep knowledge of education sector and the focus on best
management practices
• New Board of Executive Officers Formed by executives with extensive experience from companies highly focused on results, as well as by
professionals with long expertise at Estácio
• Streamlining of Organizational Structure Prioritize and standardize processes
Rigorous control on cost expenses, focusing on growth and quality of academic programs
• Variable Compensation Program and Stock Option Plan Clear and Challenging targets aligned with the financial strategic goals
Meritocracy: Business model aims to align management compensation to Company´s results
Bonus Policy for executives, academic coordinators and directors and faculty
Maximum dilution of 5%
• Best Governance Practices Fiscal Council, Audit & Compensation Committees, IFRS by end of 2008
• Stock listed at Novo Mercado (100% voting shares, full tag-along rights) Align the Company´s management with best corporate governance practices
7Who we are
3,337 12,759
691
5,029
4,382
1,776
1,614
2,337 11,706
3,098
1,322
2,975 17,520
Estácio Leadership Position: 205 k students1 – June/08
Competitive Advantages
Market-Share per State2
Source: SINAES/2006
2 – Undergraduate students enrolled (excludes public universities)
Average Tuition: R$447 (1H08)
University University Centers Upgrading from College to University
Centers (in process of approval with the Mec3)
Colleges
83 – Ministry of Education
28.6%
20.5%
8.1%
7.0%
5.9%
5.9%
3.6%
3.0%
2.2%
1.7%
1.0%
0.7%
RJ
CE
BA
PA
PE
ES
MS
SC
MG
GO
SP
PR
118,175 2,176
1,376
4,430 2,418
1,417
6,117
Largest Player in Brazil with National Footprint
1- Includes 5 recent acquisitions, which are in process of approval in Extraordinary Shareholders´ Meeting
Organic Growth
• Post-secondary education market highly untapped
• Upgrading Colleges to University Centers
• Launching new programs and offering new seats
Acquisitions
• Market share relevance – expansion and consolidation
• Strategic fit – compatible market positioning
• Priority for university centers
• Take advantages of potential synergies
Distance Learning
• Opening a new market; reaching new segments
• Produce and distribute Estácio´s own learning content
• Marginal CAPEX - sunk costs
Multiple Growth Opportunities
9Competitive advantages
• Maximizing growth opportunities in São Paulo and NE Markets
Efficiency Gains: Opportunities on G&A Expenses
• SAP: Already running in all our Units
• SIA: Academic System - running in all our units by end of 2008
10Competitive Advantages
IntegratedSystems
Streamline Processes
• Streamline of organizational structure
• Process Standardization
• BackOffice Centralization: Procurement / Accounting / HR / Legal /
Accounts Payable / Treasury / IT / Real Estate Management
Zero Based Budgeting
• Zero Based / Matrix Budget
• Internal / External Benchmarks
• Best Practices Sharing
Efficiency Gains - COGS - Faculty Costs
11Competitive Advantages
Academic Reform
MODULARIZATION: Reduce Course Pre-requisites / Reduce Attrition / Flexible Curricula
COMMON COURSES: Same Course for Different Programs (Languages, Math, etc)
STANDARDIZED PROGRAMS in all our campuses
DISTANCE LEARNING: Increase usage of on-line activities (up to 20% of Schedule)
Union Agreement - RJ Increase wages below inflation
Increase the number of students per class
12
Expertise in the Education Sector
Responsible for the Company leadership and national expansion
Active Management Meritocracy CultureProven track record in the Brazilian Capital Market (Gafisa, Submarino, Lupatech, ALL and others)
Founder Shareholders GP Investments
54.8% 20.0 % 25.2%
Higher Corporate Governance Levels
Free Float
• Listed at Novo Mercado
• 100% Tag Along rights
• 3 Independent members at Board of Directors
• Fiscal Council • No Poison Pills • Setting up of the Audit and Compensation Committee
Strong Shareholder Structure and Outstanding Governance Standards
Strong Shareholder Structure
Professional and Highly Motivated Management Team
Competitive Advantages
Management
João Rosas – CEOJoão Rosas – CEO
Worked at Vale, head of intermodal BU at ALL and consumer market at Infoglobo
Variable compensation (Bonus + Stock Option)
People Development
Lorival Luz – CFO
Wordek at Citibank (Banco Credicard) as Treasury Director and as Corporate Bank Chief of Staff
Rogério Melzi – Economic and Operational Planning
Worked as Head of Financial Planning in Suzano, Planning Officer in Inbev/Labat and Ambev
Miguel de Paula – People and Management
Worked as Head of Human Resources in Farmasa and Votorantim and HR Manager at Gerdau
Rubens Vasconcelos – Academic Officer
Member of the Board of Directors at Cultura Inglesa, COO at Máxima Consultoria and CFO at Cougar
Jessé Hollanda – Operations
Principal of Estácio´s College, Academic Director of CSN Foundation and Executive Board member of CBS
Alexandre Ferraz – Market OfficerAlexandre Ferraz – Market Officer
Worked as Sales Manager and Corporate Marketing Manager in Infoglobo
Align interests of shareholders andmanagement
Implement targets on global and individual basis (cost cutting, avg. prices, quality goals)
Reconcile quality and long-term targets
Retain key managers and professionals
• Faculty Training Program
• Trainee Program – Estácio brightest students
• Executive development program
• Qualification program for course coordinators
13
Adjusted Net Income2 60
(R$ million) 2005 2006 2007 1H08
Adjusted EBITDA Margin 7% 12% 12% 11% 11%
Adjusted EBITDA1 56 96
Net Revenue 762 829 860 428 476
Net Cash
23
(4)
81
229
31
41
43
256(48)
EBITDA ex rental1
EBITDA Margin ex-rental 20% 19% 19%
124 164 9282
1H07
172
47101 51
Financial Highlights
13
20%16%
Financial Highlights
(1) Adjusted in 1H07, to the payment of taxes in jan/07 (SESES became for profit in February 2007) and to extraordinary items in 2Q08(1) Adjusted in 1H07, to the payment of taxes in jan/07 (SESES became for profit in February 2007) and to extraordinary items in 2Q08
(2) Excluding goodwill amortization from acquisitions and extraordinary expenses(2) Excluding goodwill amortization from acquisitions and extraordinary expenses
IR Contacts & Disclaimer
Investor Relations:
Lorival Luz – lorival.luz@estacio.br
Carlos Lacerda – carlos.lacerda@estacio.br
Fernando Santino – fernando.santino@estacio.br
e-mail: ri@estacioparticipacoes.com
Phone: (55) 21 2433 9789 / 9790 / 9791
Fax: (55) 21 2433 9700
Visit our website: www.estacioparticipacoes.com/ir
15
Disclaimer:This presentation may contain forward-looking statements concerning the industry’s prospects and Estácio Participações’ estimated financial and operating
results; these are mere projections and, as such, are based solely on the Company management’s expectations regarding the future of the business and its
continuous access to capital to finance Estácio Participações’ business plan. These considerations depend substantially on changes in market conditions,
government rules, competitive pressures and the performance of the sector and the Brazilian economy as well as other factors and are, therefore, subject to
changes without previous notice. We are a holding company, and our only assets are our interests in SESES, STB, SESPA, SESCE, SESPE and IREP, and
we currently hold 99.9% of the capital stock of each of these subsidiaries. Considering that the Company was incorporated on March 31 2007, the information
presented herein is for comparison purposes only, on a proforma unaudited basis, relative to the first three months of 2007, as if the Company had been
organized on January 1 2007. Additionally, information was presented on an adjusted basis, in order to reflect the payment of taxes on SESES, our largest
subsidiary, which from February 2007, after becoming a for-profit company, is subject to the applicable taxation rules applied to the remaining subsidiaries,
except for the exemptions arising out of the PROUNI – University for All Program (“PROUNI”). Information presented for comparison purposes should not be
considered as a basis for calculation of dividends, taxes or for any other corporate purposes.
Av. das Américas, 3434 - Bloco 7 - 2º andarCep 22640-102 Barra da Tijuca - Rio de Janeiro Av. das Américas, 3434 - Bloco 7 - 2º andarCep 22640-102 Barra da Tijuca - Rio de Janeiro
IR Contact Info
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